“We did it. We delivered the mother of all deals,” with that European Commission President Ursula von der Leyen, summed up what will go down as a landmark moment in the long sometimes rocky relationship between India and the European Union (EU).
Prime Minister Modi shared her sentiments, underscoring that the free trade deal now agreed upon between India and the EU “is not just a trade agreement. This is a new blueprint for shared prosperity. Together, India and the European Union account for around 25 per cent of global GDP and nearly one-third of global trade. This agreement will open new opportunities for 140 crore Indians as well as millions of Europeans.”
Waving his OCI (Overseas Citizen of India) card, European Council President Antonio Costa recalling his Goan origins and in an oblique reference to the chaos unleashed by Donald Trump said, “Trade agreements reinforce a rules-based economic order and promote shared prosperity. That is why today’s free trade agreement is of historic importance.”
The agreement brings together two of the largest democratic economies, creating a free trade framework covering nearly two billion people.
Von der Leyen had a special word of praise for those who led the negotiations, naming Commerce Minister Piyush Goyal and the EU’s Marcos Sefcovic, Commissioner for Trade & Economic Security.
Recalling the visit of the EU College of Commissioners to India last year, she said the agreement reflected the seriousness of commitment on both sides.
“Europe and India are making history today. We have concluded the mother of all deals and created a free trade zone of two billion people, with benefits flowing to both sides,” she said. “When India succeeds, the world becomes more stable, more prosperous and more secure, and we all benefit.”
Under the agreement:
- The EU will eliminate or reduce tariffs on over 96 per cent of its goods exports to India, resulting in annual duty savings of up to €4 billion.
- India is expected to gain improved access to the EU market for key exports such as textiles, leather goods, pharmaceuticals, marine products and IT services.
- High tariffs on European machinery, chemicals, medical devices, aircraft and optical equipment will be largely scrapped.
- Duties on wines, spirits, olive oil and processed food products will be reduced, making several European goods cheaper for Indian consumers.
Bilateral trade in goods between India and the EU currently stands at around $136 billion, but officials on both sides believe the FTA could substantially expand trade and investment flows over the next decade.
Strategic, Security and Climate Dimensions
Alongside the FTA, India and the EU announced a new Security and Defence Partnership, expanding cooperation in maritime security, joint naval exercises, counter-terrorism, cyber and hybrid threats, space security and defence industry collaboration.
Von der Leyen said the partnership would help both sides reduce strategic dependencies and build resilience in an increasingly fragmented global environment.
“Cooperation is the best answer to today’s global challenges,” she said.
Over the next two years, the EU has committed around €500 million to support India’s efforts to cut greenhouse gas emissions. And to strengthen cooperation on clean energy, sustainable growth and green technologies.
Today, a mobility agreement to facilitate the movement of students, researchers and skilled professionals, strengthening people-to-people ties and innovation ecosystems was launched in the presence of the leaders.
Why the Deal Matters
The FTA between the two sides was concluded amidst the ongoing geopolitical uncertainty, conflicts, tariff disruptions, global trade tensions, and supply-chain vulnerabilities.
Leaders on both sides framed the FTA as a strong endorsement of open, predictable and rules-based trade at a time when economic nationalism is gaining ground.
While negotiations are now complete, the agreement will undergo legal vetting and ratification, including approval by the European Parliament. Officials expect the pact to be formally signed later this year and to come into force by early 2027.
For India and the European Union, the conclusion of the FTA marks not just the end of a two-decade negotiation, but the opening of a new chapter that ties together economics, strategy and shared democratic values at a critical moment for the global order.
